For Sale By Owner Tips
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Tips for Pricing Your Home
• Consider comparables. What have other homes in your neighborhood sold for recently? How do they compare to yours in terms of size, upkeep, and amenities?
• Consider competition. How many other houses are for sale in your area? Are you competing against new homes?
• Consider your contingencies. Do you have special concerns that would affect the price you’ll receive? For example, do you want to be able to move in four months?
• Get an appraisal. For a few hundred dollars, a qualified appraiser can give you an estimate of your home’s value. Be sure to ask for a market-value appraisal. To locate appraisers in your area, contact The Appraisal Institute (www.appraisalinstitute.org) or ask your REALTOR® for some recommendations.
• Ask a lender. Since most buyers will need a mortgage, it’s important that a home’s sale price be in line with a lender’s estimate of its value.
• Be accurate. Studies show that homes priced more than 3 percent over the correct price take longer to sell.
• Know what you’ll take. It’s critical to know what price you’ll accept before beginning a negotiation with a buyer.
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Open House Tips for FSBOs
Advertise your open house. Ideally you should advertise both the weekend before and the weekend of the open house. Check with the local paper to see when their ad closing deadlines are.
Create a property summary sheet. This sheet gives prospective buyers an overview of your home. Include dimensions for each room, copies of a property survey, summaries of utility costs and property taxes, and a list of when capital items such as roofs and furnace were added.
Develop a sign-in form for prospects’ addresses. You’ll ideally want both phone numbers and e-mail addresses to follow up with prospective buyers.
Put up signs. One or two days before the open house, place directional signs at major intersections within three to four blocks of your house. Be sure you check on anti-sign regulations in your area.
Get your house ready. Remove clutter, clean your house, wash your windows, add flowers, turn on lights, open draperies and blinds, remove valuables and breakables, confine pets, turn on soft music, and set up a table for your property fact sheet near the entrance.
Develop a follow-up sheet. Getting feedback on your home from prospects who attended your open house will give you a better understanding of how to make your home more appealing to buyers.
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17 Service Providers You’ll Need When You Sell:
1. Real Estate Attorney
2. Appraiser
3. Home Inspector
4. Mortgage Loan Officer
5. Environmental Specialist
6. Lead Paint Inspector
7. Radon Inspector
8. Tax Advisor
9. Sanitary Systems Expert
10. Occupancy Permit Inspector
11. Zoning Inspector
12. Survey Company
13. Flood Plain Inspector
14. Termite Inspector
15. Title Company
16. Insurance Consultant
17. Moving Company
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6 Forms You’ll Need to Sell Your Home
1. Property Disclosure Form: This form requires you to reveal all known defects to your property. Check with your state government to see if there is a special form required in your state.
2. Purchasers Access to Premises Agreement: This agreement sets conditions for permitting the buyer to enter your home for activities such as measuring for draperies before you move.
3. Sales Contract: The agreement between you and the seller on terms and conditions of sale. Again, check with your state real estate department to see if there is a required form.
4. Sales Contract Contingency Clauses: In addition to the contract, you may need to add one or more attachments to the contract to address special contingencies—such as the buyer’s need to sell a home before purchasing yours.
5. Pre- and Post-Occupancy Agreements: Unless you’re planning on moving out and the buyer moving in on the day of closing, you’ll need an agreement on the terms and costs of occupancy once the sale closes.
6. Lead-Based Paint Disclosure Pamphlet: If your home was built before 1978, you must provide the pamphlet to all sellers. You must also have buyers sign a statement indicating they received the pamphlet.
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Is Your Buyer Qualified?
Unless the buyer who makes an offer on your home has the resources to qualify for a mortgage, you may not really have a sale. If possible, try to determine a buyer’s financial status before signing the contract. Ask:
1. If the buyer has been prequalified or preapproved (better) for a mortgage. Such buyers will be in a much better position to obtain a mortgage promptly.
2. Does the buyer have enough money to make a downpayment and cover closing costs? Ideally, a buyer should have 20 percent of the home’s price as a downpayment and between 2 and 7 percent of the price to cover closing costs.
3. Is the buyer’s income sufficient to afford your home? Ideally, buyers should spend no more than 28 percent of total income to cover PITI (principal, interest, taxes, and insurance).
4. Does your buyer have good credit? Ask if he or she has reviewed and corrected a credit report.
5. Does the buyer have too much debt? If a buyer owes a great deal on car payments, credit cards, etc., he or she may not qualify for a mortgage.
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Sellers make more money when they use a real estate professional.
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Real estate professionals are experts in marketing who can sell a home for more money in less time.
Real estate professionals assist both sellers and buyers with a variety of the details surrounding a real estate transaction. Real estate pros can help a seller set a realistic price and ensure the proper paperwork and various disclosures and inspections are handled correctly.
In addition, real estate professionals are experts in attracting qualified buyers. A broker or sales associate also can show a home more objectively than can a seller who may be emotionally attached to the home, and who might become unnerved by prospective buyers’ critical comments. The real estate pro also checks the financial capability and bona fides of buyers before allowing them onto a seller’s property.
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For Sale By Owner (FSBO) Statistics
Did you know?
. . . the typical FSBO home sold for $198,200 compared to $230,000 for agent-assisted home sales.
FSBO Methods Used to Market Home:
Yard Sign . . . 61%
Friends/neighbors . . . 46%
Newspaper ad . . . 37%
Open House . . . 29%
Internet . . . 17%
Most Difficult Tasks for FSBO Sellers:
Getting the right price . . . 14%
Understanding paperwork . . . 17%
Preparing/fixing up home for sale . . . 16%
Attracting potential buyers . . . 9%
Having enough time to devote to all aspects of the sale . . . 8%
Source: 2005 National Association of REALTORS® Profile of Homebuyers and Sellers